NFLX Trade Set Up

NFLX was mentioned several times last week, this looks like  trade that could play right in to our waiting hands.

Here's the updated charts for NFLX...

 There's a daily gap in NFLX and it's right around the Trend Channel which is set to a 50 day "character setting" rather than the shorter 11 day, this is around the area I'm hoping to catch NFLX with some positive divergences for the next trend which if you recall in our trend expectations, after a sharp pullback, I'm looking for a sharp move higher, perhaps a short squeeze even, but more on that in a minute.


 The 1 min trend finally signaled NFLX was ready to move down from this plateau it has been trading on.

 The divergence on the 30 min chart is quite clear, not much noise so this tells us the path of highest probabilities is down, but not in a destructive way, rather a constructive way, this is why we'll be watching for signs of accumulation on a pullback.

 The 60 min chart which is more important that the 30 min shows what may in fact be a fairly large (for this market ) double bottom with a leading positive divergence on the second bottom which is a common occurrence for this pattern.

 The 4 hour chart which is even more important shows the same pattern with less noise, this is why I want to look in to buying NFLX on price weakness which should roughly fit the timing of the next "expected" trend, from what we see now.

 As for volatility, if it were me running the show and trying to shake out and set up as many traders as I could, I'd be heading back in side the large bear flag on the SPY seen above, this would make shorts think twice and probably see some cover, then another move lower could be set up.

If something like that happens, NFLX would be likely to fill this gap in yellow, so for now I'd consider this noise, but keep watching for that move lower in to underlying strength. With the size of the potential base, it should be able to sustain an impressive move up and the entry would be at much lower risk and higher probabilities.